Yanbu Surges to 5-Year High on Bonus Shares Plan: Riyadh Mover

Yanbu Cement Co. surged to the highest level in more than five years after the Saudi Arabian maker of the building material said it is seeking approval for a 50 percent capital increase through bonus shares.

The stock advanced 4 percent to 90.75 riyals, the highest level since January 2008, at the close in Riyadh. About 1.2 million shares were traded, more than 16 times the three-month daily average, according to data compiled by Bloomberg. Yanbu Cement was the fourth-biggest gainer by percentage points on the benchmark Tadawul All Share Index, which increased 0.4 percent.

“The announcement is a huge incentive for shareholders,” said Mohammed al-Omran, a financial analyst and president of the Gulf Center for Financial Consultancy in Riyadh. “The outlook for the company in particular and the cement industry overall is positive. There is huge demand for cement in residential, commercial or even governmental sectors” given the kingdom’s spending plans, he said.

Yanbu Cement’s full-year profit surged 36 percent to 720 million riyals ($192 million), beating the average estimate of five analysts compiled by Bloomberg. The company has a 12-month dividend yield of 2.8 percent, compared with 2.4 percent for Najran Cement Co. Saudi cement companies have benefited from more than $500 billion in government spending on projects including infrastructure. The All Share Cement Index has gained each year since 2009, including an advance of 14 percent in 2012.

Yanbu Cement’s output of the material in January rose 42 percent from a year earlier, according to Yamama Saudi Cement Ltd. data compiled by Bloomberg. The company’s shares gained 15 percent in 2012, compared with an advance of 6 percent for the Tadawul.